Ag analyst Olivia Agar from Mecardo speaks at ALSA conference

The impressive figure comes as the value of red meat has fallen by more than 50 per cent in 12 months.

The bittersweet outlook was delivered during the Australian Livestock Saleyards Association Conference in Bendigo on Thursday by ag analyst and Mecardo business development manager Olivia Agar.

Decreasing demand for top-end meat cuts, high inflation, rising cost of living pressures and a growing global population have combined as significant challenges and opportunities for the industry, Ms Agar said.

In the second quarter for 2023, lamb slaughter rose by 25pc and mutton jumped 75pc compared to the five-year average, Meat and Livestock Australia data revealed, despite lamb values shedding 53pc at saleyards in 12 months.

"At a time when we're seeing consumer demand soften around the world for red meat, we're actually putting more lamb out into the market and into the trade than we ever have before," Ms Agar told the conference.

"One of the reasons is increasing supply, so we're seeing a lot more sheep and lambs coming to markets and we've seen a big increase in slaughter numbers heading to the kill.

"This is despite prices falling off a cliff."

Ms Agar said in the first half of 2023, MLA data showed domestic lamb production was up by 9pc on the five-year average, with predictions that number would be broken again next year.

"The other part is we've also got much heavier carcase lambs and sheep that are being processed now and that comes down to improving genetics and fertility," she said.

The average Australian trade lamb carcase in the June quarter sat at 24.7 kilograms, down from the record 25.8kg year-on-year but well above the 25-year trend.

According to MLA, sheep slaughter is forecast to lift by 24pc or 1.46m million to reach 7.6m head in 2023.

In 2024 and 2025, further rises are forecast, reaching 8.46m and 9.48m, respectively.

Meanwhile, the outlook for cattle, despite bleak prices in every Victorian saleyard, is somewhat different.

Ms Agar said cattle farmers would likely benefit from a herd rebuild taking place in the US and said Australian exports hinged on what was taking place in the US, Middle East and China.

"Their domestic supply of beef will be tightening and they're at record low herd numbers so if they do move into a strong rebuild cycle, it will be like what we saw in the Australian market a few years ago," she said.

"This will be positive for Australia as a supplier and as a competitor because there will be a lot less supply out of the US and Australia could absorb some of that demand."